Data and securityWhy the public sector can’t ignore the value of data

Why the public sector can't ignore the value of data

We discuss why the public sector needs to think long and hard about unlocking the potential value of data

The government has published a discussion paper outlining how data can be the catalysts for economic growth. In the discussion paper, which will be used in the development of the government’s national data strategy, the importance of data in underpinning international trade, fostering new products and processes and in “enabling entirely new business models” is discussed. Importantly, the value of data is also discussed.

The paper outlines how technological change has radically increased both the volume of data in the economy, and our ability to process it, moving on to add that this change “presents an opportunity to transform our economy and society for the better”.

The report’s authors suggest that data-driven innovation holds the keys to addressing some of the most significant challenges confronting modern Britain, whether that is tackling congestion and improving air quality in our cities, developing ground-breaking diagnosis systems to support our NHS, or making our businesses more productive. The UK’s strengths in cutting-edge research and the intangible economy make it well-placed to be a world leader, and estimates suggest that data-driven technologies will contribute over £60 billion per year to the UK economy by 2020.

Significant steps

It’s unsurprising then that over the last few years, the government has taken significant steps to strengthen the UK’s position in data-driven innovation, including by agreeing the Artificial Intelligence Sector Deal, establishing the Geospatial Commission, and making substantial investments in digital skills.

However, recent events have raised public questions and concerns about the way that data, and particularly personal data, can be collected, processed, and shared with third party organisations.

The Data Protection Act 2018 updates the UK’s world-leading data protection framework to make it fit for the future, giving individuals strong new rights over how their data is used. Alongside maintaining a secure, trusted data environment, the government has an important role to play in laying the foundations for a flourishing data-driven economy. This means pursuing policies that improve the flow of data through our economy, and ensure that those companies who want to innovate have appropriate access to high-quality and well-maintained data.

The need for data structure

The economic value of data: discussion paper highlights the potential value of data. The OECD estimates that in 2015, the global volume of data stood at 8 zettabytes (8 trillion gigabytes), an eight-fold increase on 2010. By 2020, that volume is forecast to increase up to 40 times over, as technologies including the Internet of Things create vast new data sets.

This sheer increase in quantity has pushed data up the political agenda, capturing the attention of businesses and policy-makers alike.

When it comes to data, however, volume is not the sole indicator of economic value. Most global data is unstructured, or the ‘exhaust data’ formed as a by-product of business. As long as such data is inaccessible for the purposes of analysis, or is unlinked and unaggregated, its potential value may remain unrealised. This is clearly a problem the public sector needs to address.

Measuring the value of data

A discussion about how to measure the value of data was recently held by the Open Data Institute. A subsequent blog post on the gathering highlighted attempts made to put a value on data. For example, a 2017 report on the transport sector, produced by the ODI and Deloitte, illustrates why data sharing is so important. It states that an estimated £15bn is not being realised due to three main reasons:

  1. siloed thinking;
  2. a fear of breaching privacy, security and safety;
  3. and a belief that the costs of sharing data outweigh benefits.

Clearly, as the ODI says, until those problems above are overcome and society makes more progress in learning how to value data, then innovation will continue to be stilted and problems that affect citizens and consumers will remain unaddressed.

The data value paradox

The ODI blog, which well worth a read, goes on to make a very valid point. It states that there is There is a paradox to be resolved that is central to the issue of valuing data. A single piece of data only becomes useful – and therefore valuable – once combined with other data.

The Strava heatmap demonstrates this. Individual fitness routes don’t tell us much apart from an individual’s habits, but when every Strava users’ routes are combined we can learn a great deal about the popularity of certain areas and general trends across a population. This is valuable to local communities who can better support running infrastructure and planning, but the map could also be used to identify secret military bases across the world. Hence, with the power of stewarding large datasets comes great responsibility.

But if data cannot be valued as the sum of its parts – how can it be valued?

Only as good as its insight

The answer, at least in many people’s eyes, is that the value is whatever the insights pulled from data – something that should be easier thanks to technology.

HM Treasury’s data discussion paper outlines how global increases in data coincide with significant advances in data processing technologies over recent years. Cloud storage, new data science techniques, dramatic increases in processing power and speed, as well as the further development of Artificial Intelligence (AI) have all enabled organisations to unlock new insights from their data assets, often in the form of trends, patterns and associations.

This potential to turn data into useful insights is an important factor in creating economic value, as these insights can be used by decision-makers to optimise the allocation of resources and develop new capabilities. Research has shown that firms adopting data-driven decision-making can have 5-6% higher output and productivity, with the European Commission calculating that “even limited use of big data analytics solutions by the top 100 EU manufacturers could boost EU economic growth by an additional 1.9% by 2020”.

Data and the public sector

In the public sector, data is playing an increasing role in transforming public services. This is particularly true in transport, where there has been significant data-driven innovation. Over the last ten years, TfL has led the world in opening transport data free of charge, including to external app developers. A recent study by Deloitte found that use of this data now contributes up to £130m per year to the London economy, for example through time-saving for Londoners, reduced costs for TfL, and high-value job creation.

That highlights the value of data to the UK – and it’s something the whole public sector can’t afford to ignore.

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